Save Money When Setting Up Your LLC! (LegalZoom, Incfile, and more!)

LegalZoom, Incfile, ZenBusiness, and Tailor Brands. Have you ever heard of these companies? They all share one thing in common. They spend a lot of money on advertising and marketing, including here on YouTube. They're also all companies that are known as third-party filing companies that can help businesses like you form an LLC. But have you ever wondered if these companies are actually worth it? Well, today you are in luck because I am gonna walk through and compare between these four major filing companies and let you know exactly what I think is worth it. I am online business attorney Brittany Ratelle. Thanks so much for being here. Here on this channel. This is where I give tips and tricks to help you show up as a more legally legit business owner. Remember that while I am an attorney, I'm not your attorney. None of this is official legal advice. However, I hope that it's informational and helpful for you. Let's get into it and dig into what exactly should you be doing if you want to file your LLC and do it the right way. First things first, it's important to note that this is just my opinion and my experience with logging on and trying to file and set up a fake company as of today, June 20th, 2023. Obviously, pricing on any of these companies prices is subject to change and it may vary from time to time. So this may or may not be the most accurate depiction of their pricing when you may be comparing all of these services to see which is the best fit for you. Also note that I tried to set this up in terms of an apples-to-apples experiment, so I was really consistent by trying to set up a sample single-member LLC in the state of Texas. I wanted an EIN, or otherwise known as your tax ID number. I also wanted an operating agreement and a registered agent service. A registered agent is the agent that you are appointing to receive service or process on of your company. Let's get into this chart that will directly compare the pricing. As you can see, we started with LegalZoom first. And one thing to note is that you don't get the actual pricing until you go several steps into each of these companies. Some, not only do you have to go through several question and answers where they try to upsell you several different things, but some of them you actually have to put in an email address and a phone number. Now I had some fake ones to use, but I can guarantee if I'd put in my normal information that I was going to get some marketing callbacks. So LegalZoom, after I went through all of their things and selected with our fake scenario, to here, I got to a price of $550. However, there's a huge caveat here that this is the price for the first year when they're including the registered agent service. This service is $300 a year, so know that there's an ongoing fee for that, and it's quite hefty. A registered agent should really only cost about $60. Next, we have Incfile. It calls it an operation agreement. I think that's a little weird. Almost everyone I know calls an operating agreement. EIN, electronic delivery, sure. And it comes out to $500, and this does include registered agent service, but again, it's only for a certain period of time. It's certainly not set up forever. Next, we have Tailor Brands. Now, Tailor Taylor Brands, I would say, is newer on the scene. LegalZoom's been around for a while, so is Incfile. Taylor Brands is new, but they seem to be investing a lot in their marketing budget. Let's just give them an honest look here. Again, we have LLC formation, expedited processing, annual compliance, and operating agreement was $200, but that does not include these fees, which are the registered agent and getting your EIN, and then it comes to $500. That actually comes out pretty similar to be Incfile. And then ZenBusiness, which was $200 a year, but then we had to add in the Texas filing fee of $300, and then we also get to $500. So this is the cheapest that anyone is ever going to be able to charge you, including if you do this on your own. You're going to pay $300 to the state of Texas. So these weren't crazy in terms of fees. I've seen much more. But let's get into if you were going to try to use one of these companies, how can you make sure that you get to this lowest price possible? First of all, number one thing to be aware of, again, these companies pay a lot on marketing. They market all over the internet, everywhere from Instagram to TikTok to YouTube. So as soon as you put any information into a search engine about LLC, you're going to see a lot of ads for these companies and other just like them. Just know that just because it's the first, second, or third option to come up doesn't mean it's the best choice. It doesn't mean it's the cheapest, doesn't mean it's going to give you the best customer service. Be aware of that, that you are the product and they are selling to you hard. Number 2, beware of upsells. As you're moving through any of the third-party filing formation portals, when all of these were universal in this and that they tried to upsell me, some of the common things that they will try to upsell you are things like expediting and rush fees. And most of the time these are not worth it, especially because they likely don't have a special relationship with your state that you're trying to get filed with. They're like anyone else, that they're going to ask you some questions, they're going to mail in a form, and it's going to sit in a pile. Most states take 2 weeks at the most, that unless they pay an expedited fee, which by the way you can set up on your own, you're really not going to get faster service than that. Also look for upsells of things like registered agent services. These are ongoing services. In the open market, this costs about $60 a year. Virtual mailboxes are about $10 a month. So if anyone tries to sell you a package that's 5x or 10x the cost of this, get a better deal elsewhere. Also look out for things about compliance or annual reports. Most states do require that you do something annually to keep your LLC up to date, but again, this is usually $15 or $30. It's something that you can do on your own. Number 3, things that no one needs, literally no one. Fancy binders, fancy stationery, a rubber stamp with your LLC name on it. You don't need to pay for these. I consider these to be the scammy part of these third-party filing systems. Print your documents out and keep them safe, but you don't need them in a fancy binder. You can get that on your own at Target and it'll probably be cuter anyway. Number 4, beware of subscriptions. I've had lots of clients come to me after signing up for services and they've gotten upsold and they got into a subscription service that was hard to cancel. They got stuck on customer service, you know, the whack-a-mole from hell. So just know that some of these things can be hard to get out of and unwind once you're in them. That's another thing that I have is a beef with doing this with somebody else rather than just doing it your own or hiring an attorney. If you have to make little changes, you change your registered agent or you change your address or you want to add someone to your LLC, you can be charged a lot more than you need to if you have the power to just go on and log into California or Texas and do that yourself. Last but not least, remember that you can DIY your LLC. You can give some TLC to your LLC, and that the best way to do that is to follow my other video where I walk you through exactly through the procedure of how to set up your LLC. I'm here to make this easier for you, more cost-effective. I will say that if you have more than one business partner, if you have a spouse, a friend, a sister, a bestie who you're going to do business with, it's worth it to set up an operating agreement and to have an attorney help you with this. At the bare minimum, get a really good operating agreement agreement online. I sell some in my contract shop at Creative Contracts, or work with an attorney to get that set up. I think that is where you're going to get the most bang for your buck, and you are going to be very glad that you had someone walk you through with the kind of a personal counsel. That's my parting advice for you. If you have any questions about this, or you have your own experience with using any of these companies, I would love to hear honest words. I am not an affiliate for any of these services, so I can say this is my honest, unfiltered opinion. Yes, I'm an attorney, and I have my bias that I think you should use an attorney and lawyer when you can, but I understand if that's not a possibility for you right I'm attorney Brittany Ratelle. If you haven't liked and subscribed, please do and make sure that you don't miss any of my weekly videos that can help you